Understanding The New Automobile Wholesale Cost
New car dealers buy their vehicles from the manufacturers, paying the new car invoice price, which is essentially the wholesale price on a new car. The dealers then sell their vehicles to the public at higher retail prices, usually close to the sticker price. So car buyers who want a great deal must first learn the new car invoice prices before they start negotiating. It is safe to say that most people will attest to the fact that this number is quite secretive. Only a select few know what the real dealer’s cost is on a new vehicle. We all know that most dealerships quote different prices for the same vehicle but most of us do not know why. The wholesale cost the dealer pays to the manufacturer is the same across the board, meaning that Dealer A pays the same price as Dealer B for the same vehicle. However, there are further costs added to the new car invoice price that the dealer must pay, such as the transportation and delivery fee. However, it makes no difference where a dealer is located because those delivery and transportation fees are the same across the board. Another added cost to brand new cars is the interest charges on the loans that the dealer obtains directly from the manufacturer.
The longer a car remains on the lot, the more money that car will cost the dealer. These loans are known as floorplans in the business. In addition to floorplans there are other charges known as holdback. But holdback is not a real expense, since the dealer receives the holdback amount as a rebate from the manufacturer after the sale. In addition to the above charges, there could be advertising fees added onto the invoice price. These fees can come directly from the dealership or from a regional dealer group. After having pointed out all these various added charges and fees, the consumer has to figure out a way to purchase a brand new vehicle below the wholesale cost. To be a smart consumer means to take advantage of situations that arise, such as slow car sales. Manufacturers do not appreciate a huge inventory sitting idle on a lot because it means a reduction of orders. When this situation occurs, the automakers will offer incentives. Look out for these sales that offer zero percent financing or large rebates. Before making a move, do the calculations to figure out exactly how much you will be saving. New car dealers can only have these special sales when the manufacturer steps in. Therefore, a consumer cannot expect to purchase below the invoice price if incentives are not in place. They are expected at some time throughout each year, and they have expiration dates. When one ends, a new program may begin in order to do away with the old and bring in the new.